UPDATE: Best Buy shares dropped 31% to $25.78 in early trading. The stock traded more than four times its average daily volume 15 minutes after the opening bell.

Best Buy shares have been on a roller coaster ride for some time now. After rising as high as $48 in 2010, shares plunged to $11.29 at the end of 2012. Over 2013, though, the company’s stock rebounded sharply as it implemented a well-received turnaround plan. It was the S&P 500′s second-best performing stock, up more than 200% and trailing only Netflix Inc.

That, apparently, is just providing a higher point from which investors are jumping.

The plan, well-received or not, could do only so much to alleviate the reality on the storeroom floor. Retailers from Sears Holdings Corp. to Macy's Inc. to J.C. Penney Co. to Wal-Mart Stores Inc. are all feeling pressure from weak consumer demand. After rival Circuit City went out of business in 2008, Best Buy saw an upswing in its business. In 2011, its sales peaked at $50.7 billion, and earnings were $3.64 a share. But the changing marketplace is hurting the business. For 2013, the company is expected to earn $2.46 a share on sales of $43 billion.

This morning’s warning may send a few analysts back to their spreadsheets to rejigger those numbers.

CEO Hubert Joly tried to put a brave face on things during this morning’s conference call. He noted the company saw market-share gains “across the board,” but acknowledged that mark-downs didn’t help anybody in the industry, and the slide in the electronics market was a “big surprise.”

“This management team is not shaken by this bump,” he said. “One of my middle names is frugality.” On that front, CFO Sharon McCollam said the company’s $725 million cost-cutting target is likely to get “much bigger.”

It’s hard to know how well that will mollify investors and analysts.

Best Buy’s warning “to put it mildly, it’s on the shocking side,” wrote Belus Capital Advisors’ Brian Sozzi, who rates the stock a buy ($45 price target). This warning will likely reset expectations, and he predicts the company will have to be more aggressive on pricing in 2014; in other words, more price slashing that puts more pressure on margins. “Best Buy’s calendar 2014 initial guidance could be well below current consensus forecasts,” he said.

“It just seems that the promotions did not drive incremental sales, that opening on Thanksgiving just added costs, and did not provide any incremental sales,” Janney Capital Markets analyst David Strasser wrote. He noted that there is “pain out there” for other consumer electronics retailers, and there’s potential to make money after this selloff, “but we have to make sure that the category can perform this year.”